Cyprus financial regulator CySEC has announced that it is recalling the license suspension of Magnum FX (Cyprus) Ltd. Magnum FX operates the ETFinance retail FX and CFD brokerage brand at etfinance.eu. The company is a sponsor of the Real Madrid Basketball club.

But there are some conditions.

ETFinance was one of four retail FX brokers which had their CySEC CIF licenses suspended at the beginning of June. The UK’s FCA, and a number of other EU country regulators, also removed the four firms’ ability to passport their license to those countries. (We believe that the passport-cancellation move by the FCA is still in force).

CySEC said that its decision was made in part because the company has stopped accepting and onboarding new clients, and has also stopped all marketing and promotion of its services.

ETFinance / Magnum FX will stop using call centers for the promotion of its services and for contacting clients. The company will have teams based in Cyprus to provide only retention and support services to its clients. The teams will not be initiating any calls to clients, but rather will only be responding to calls at the initiation of the client.

And finally, the company has said that it intends to replace members of its management.

What this seems to mean is that ETFinance has been allowed to remain licensed but with a very limited scope of activity, until such time as the company onboards new management agreeable to the regulator, at which time CySEC will decide whether or not to remove the aforementioned limiting conditions.

The full text of the CySEC notice follows:

18 June 2020

CYSEC Decision

Announcement date: 18.06.2020; CySEC Decision date: 15.06.2020

Regarding: Magnum FX (Cyprus) Ltd

Legislation: The Investment Services and Activities and Regulated Markets Law

Subject: Recall of suspension of CIF licence

The Cyprus Securities and Exchange Commission (‘the CySEC’), further to its Decision published on 01 June 2020, informs the public that, at its meeting dated 15 June 2020, decided to recall its decision for the partial suspension of the authorisation of the Cyprus Investment Firm Magnum FX (Cyprus) Ltd (‘the Company’), number 359/18, pursuant to paragraph 9(3)(a) of Directive DI87-05 for the Withdrawal and Suspension of Authorisation, as it has been satisfied that the Company has complied with articles 25(1), 25(2)(b), 25(3), 25(4)(a) and 25(5) of The Investment Services and Activities and Regulated Markets Law of 2017 (‘the Law’).

In particular, the CySEC has reached the above decision, taking into consideration, inter alia, the following:

A. The Company has taken the following measures:

1. The Company has informed that it has stopped accepting and onboarding new clients.

2. The Company has informed that it has stopped all marketing and promotion of its services.

3. The Company has informed that it has assigned to its internal auditor the assessment of its compliance with Article 9 of the Directive 87-05 and the submission of weekly reports to the CySEC.

B. The Company has assured the CySEC that it has taken or intends to take the following measures:

1. The Company has informed that it has stopped using call centers for the promotion of its services and for contacting clients. The Company will have teams based in Cyprus to provide only retention and support services to its clients. The Company has informed that the teams will not be initiating any calls to clients and they will only be responding to calls for assistance/support, at the initiation of the client.

2. Τhe Company has informed that it will put in escrow with its internal auditor a specific amount, which will be utilized to resolve existing open client complaints, where justified.

3. The Company has informed that it intends to make changes in its organizational structure and more specifically, to replace members of its management.

4. The Company has informed that it has stopped all marketing and promotion of its services, until all proposed measures are implemented.